Threat remains of further interest rate rise

The threat of another interest rate rise of a quarter point looms on the
horizon, following a warning from the
The Bank of England.

In its
inflation report,
the Bank said that inflation was on course to decline
sharply over the year, settling at around the government’s 2% target by the end
of 2008.

However, for this to happen, the City has forecast that rates will have to
rise to 5.5% – what would be a fourth interest rate rise since last August.

Economists have pencilled in May as the most likely month for an interest
rate rise.

Further reading:

ICAEW survey: Economy has reached its peak

No surprise as rates left unchanged

Economics: Inward bound

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